A big-picture budget with some troubling details: Globe & Mail Op-Ed
Published in the Globe & Mail on February 12, 2014
By Alexandre Laurin
An understated highlight of the federal budget was that, for the first time in five years, Finance Minister Jim Flaherty has a healthy baseline. His cumulative $45-billion surplus projected over the next five fiscal years would be the envy of most past federal finance ministers, not to mention Mr. Flaherty’s provincial counterparts. That is a situation worth cultivating – the minister’s prudent approach toward that surplus deserves applause.
The budget contained no bold and costly initiatives. It commits $5.7-billion of new spending over five years on small, targeted programs. It put aside $3-billion per year for prudence. And it improved the…
We Have A Deal With Europe. Let’s Not Blow It: Globe And Mail Op-ed
Published in the Globe and Mail on October 18, 2013
By Lawrence Herman
We finally have a deal with Europe, called a comprehensive economic and trade agreement (CETA).
It took longer than expected and there was a real sense of drift, many thinking that the effort wasn’t going anywhere. But persistence and goodwill seems to have paid off.
The only problem is, we don’t have the text yet. All we have is the outline of an agreement in principle. A lot of what’s being put out by the Prime Minister’s Office has to be accepted on faith.
Judging from the rosy press conference given by Prime Minister Stephen Harper and EU President Jose Barroso earlier Friday, however, the hard negotiations are over and it’…
Housing moves: Canada, U.S. contemplate changes to the way we finance housing: Financial Post Op-Ed
Published in the Financial Post on October 2, 2013
By Finn Poschmann
Last Wednesday Scotiabank sold the first Canadian bonds backed by consumer lines of credit in 12 years. The highly rated issue sold at market, according to a Bloomberg report, at an impressive 78 basis points over similar-term Canadian government bonds.
Critics may worry that such events signal a continuing explosion in household debt and a return of the boom and bust “wild West,” U.S.-style marketplace.
But there is another way to see it. The bonds’ risks will be borne by the issuer and investors, not unwilling and unknowing taxpayers, who back most of the mortgage risk in Canadian and U.S. housing markets.
And change is afoot in the…
Predicting Recessions in Real-Time: Mining Google Trends and Electronic Payments Data for Clues
Predicting recessions in real-time could be made possible by mining vast new sources of electronic data, according to a report released today by the C.D. Howe Institute. In “Predicting Recessions in Real-Time: Mining Google Trends and Electronic Payments Data for Clues,” author Greg Tkacz, pronounced “katch”, considers whether Google searches and the growth of electronic […] Who is Still Standing in Line? Addressing a Mismatch of Skills and Jobs in the Canadian Labour Market
While the Canadian labour market has shown great resilience since the last recession and is nearly back to normal, important weaknesses remain for youth and the long-term unemployed, according to a report released today by the C.D. Howe Institute. In “Who is Still Standing in Line? Addressing a Mismatch of Skills and Jobs in the […] C.D. Howe Institute Business Cycle Council Issues Authoritative Dates for the 2008/2009 Recession
The newly established C.D. Howe Institute Business Cycle Council has determined authoritative dates for the onset of the 2008/2009 recession and the resumption of economic growth in Canada. Based on a careful analysis of key economic indicators, the Council determined that the recession started in November 2008 and lasted seven months until May 2009. As a foundation for further work on business cycles, the Council has also agreed on a common set of reference dates for historical recessions in Canada starting in 1929.
The Institute created the Business Cycle Council to act as an arbiter of business cycle dates in Canada. It comprises a panel of expert business and academic macroeconomists and economic historians.…
Turning Points: Business Cycles in Canada since 1926
Market-based economies tend to exhibit cyclical behaviour. The recent financial crisis, with devastating impacts that are still being felt today, has added urgency to the drive to improve our understanding of business cycles. Pinpointing key turning points in the economy, meaning when recession takes hold or growth resumes, is vital for policymakers, businesses and consumers […]Housing Bubbles and the Consumer Price index: A Proposal for a Better Inflation Indicator
The Bank of Canada needs a better inflation indicator that is more sensitive to swings in house prices than the Consumer Price Index (CPI), according to a new report from the C.D. Howe Institute. In “Housing Bubbles and the Consumer Price Index: A Proposal for a Better Inflation Indicator,” Philippe Bergevin points out the CPI […] Consumer debt: concerning but not critical: Financial Post Op-Ed
Published in the Financial Post on April 11, 2012
By Philippe Bergevin and James MacGee
As a percentage of income, Canadian household debt levels are higher than at any point in recent history and now higher than those of U.S. households. This raises concerns over the sustainability of household finances, the risks to the broader economy and the merits of government intervention.
Recent debate has understandably focused on the housing market and on the risks associated with household mortgage debt. But consumer credit, which excludes mortgages but includes household debt such as auto loans, credit card debt and lines of credit, has risen by more than a factor of five since the late 1970s and, at 43% of disposable…
Core, What is it Good For? Why the Bank of Canada Should Focus on Headline Inflation
The Bank of Canada should place less emphasis on the “core” Consumer Price Index (CPI) in explaining its policy choices, according to a report released today by the C.D. Howe Institute. In, “Core, What is it Good For? Why the Bank of Canada Should Focus on Headline Inflation,” authors Philippe Bergevin and Colin Busby say […] Are We Ready for that Double Dip? Financial Post Op-Ed
Published in the Financial Post on August 19, 2011
By Philippe Bergevin and Finn Poschmann
In Ottawa Friday, Minister of Finance Jim Flaherty and Bank of Canada governor Mark Carney gave their updates on the Canadian economy. The big question: How does the darkened global picture affect Canada’s economic prospects and the federal government’s ability to return to a balanced budget on schedule?
By most accounts, the Canadian economy is doing well. The United States entered recession, defined as a significant decline in economic activity, in December 2007 (see graph above). Canada entered recession later, in fall 2008.
And Canada’s recession was shorter: the U.S. economy contracted for 18 months, while the…